Wednesday 7 April 2010

Resource consents

Shades of the Discount Brands case from a few years back, reported in today's Christchurch Press:
Resource consent for a planned Christchurch supermarket should be declined, a city council planner says.
Senior council planner Clare Revell said traffic volumes, noise and other issues could affect neighbours, while one of the supermarket’s competitors, Avonhead Fresh Choice, could lose $10 million in the first year.

"While the proposal will allow for more convenient access to a supermarket for some members of the community close to the proposed New World, it is my opinion that this may be at the expense of a number of others who currently utilise and rely on the Avonhead Mall as their existing district centre."
Recall that in Discount Brands, the Court decided that the amenity value of a proposed mall's competitors counted as a resource that needed to be protected under the Resource Management Act. Chapman Tripp noted:
When irrelevant trade competition effects become relevant amenity effects

Section 104(3)(a) of the RMA (previously section 104(8)) provides that a consent authority cannot have regard to trade competition effects when considering a resource consent application. However, the definition of “environment” in the Act specifically includes social and economic considerations affecting people and communities. So when do trade competition effects, which are irrelevant under the Act, become relevant social, economic or amenity effects?

The principle that the Courts have generally applied is that while they may not have regard to the direct effects of trade competition, it is legitimate to take into account flow-on effects that may be consequent on a down-turn in business in a particular centre. It is the consequential social and economic effects on people and communities served by the existing shopping centres that are relevant.

However in the Discount Brands case, the Court of Appeal considered that there would only be a relevant environmental impact which was more than minor if there was a “ruinous” or “major commercial and economic impact on existing centres”. The Supreme Court did not accept that such a high threshold was necessary or appropriate. Justice Blanchard considered that:
“ equating major effects with those which were “ruinous” the Court went too far.A better balance would seem to be achieved in the statement of the Environment Court, …that social or economic effects must be “significant” before they can properly be regarded as beyond the effects ordinarily associated with trade competition on trade competitors.”
Chief Justice Elias provided further comment, stating:

“The effects on the environment in issue were adverse effects on the amenities provided by the existing centres. There is no basis in the plan for suggesting that any such adverse effect, which could be social as well as economic, must threaten the viability of the existing centres in order to be more than minor.”
The Supreme Court also gave a useful reminder that even the “significant” effects test is not necessary for amenity effects to be established. Justice Blanchard noted that it would be “necessary for a consent authority first to consider how trading patterns may be affected by a proposed activity in order that it can make an informed prediction about whether amenity values may consequentially be affected.”
The Supreme Court’s decision clarifies the position under the Act as to when trade competition effects will be considered relevant economic, social or amenity effects.
I wonder when and if National will get around to fixing this part of the RMA....

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